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Bellfont Company produces door stoppers

Economics

Bellfont Company produces door stoppers. August production costs are below:

Door Stoppers produced 76,000

Direct material (variable) 20,000

Direct labor (variable) 40,000

Supplies (variable) 20,000

Supervision (fixed) 26,500

Depreciation (fixed) 24,600

Other (fixed) 5,400

In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont's production cost per door stopper for September?

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Bellfont's production cost per door stopper for September is calculated as follows:

 

  $
Direct material (variable) ($20,000 /76,000 * 100,000 ) 26,316
Direct labor (variable) ($40,000 /76,000 * 100,000 ) 52,632
Supplies (variable) ($20,000 /76,000 * 100,000 ) 26,316
Supervision (fixed) 26,500
Depreciation (fixed) 24,600
Other (fixed) 5,400
Total Cost $161,764

production cost per door stopper for September = $161,764 / 100,000 units

= $1.62 Per Unit

 

Bellfont's production cost per door stopper for September is $1.62 Per Unit

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